*

Markets close at 1 p.m. ET in holiday-shortened session

*

Dow, Nasdaq take win streaks to four; S&P up for third

straight

*

Crypto-related stocks climb as bitcoin gains

*

Benchmarks higher on first day of Santa Claus rally

*

Indexes up: Dow 0.91%, S&P 500 1.1%, Nasdaq 1.35%

(Adds closing prices)

By David French

Dec 24 (Reuters) - Wall Street's main indexes all closed

higher on Tuesday, with gains in megacap and growth stocks

bolstering benchmarks in a truncated Christmas Eve session.

Both the Dow Jones Industrial Average and Nasdaq

Composite scored four straight sessions of gains, with

the S&P 500 taking its winning streak to three sessions,

marking the first day of the seasonal Santa Claus rally.

The Dow had skidded for 10 straight sessions earlier this

month, its longest losing streak since 1974.

With megacap stocks having outsized influence on markets,

their performance is often a key driver of indexes. When coupled

with reduced trading volumes and few other catalysts, as many

investors take time off for the holidays, this is even more

pronounced.

All the so-called Magnificent Seven megacap technology

stocks climbed on Tuesday, led by the 7.4% jump in Tesla

shares.

The automaker's best one-day gain in six weeks helped push

the consumer discretionary index 2.6% higher. It was

the top gaining sector in the S&P, with all 11 ending in

positive territory.

Elsewhere, chip manufacturers were also buoyant. Broadcom ( AVGO )

and Nvidia ( NVDA ) rose 3.2% and 0.4%, respectively,

while Arm Holdings climbed 3.9%, recouping most of the

losses suffered the previous day from losing a court case.

Growth names rose despite U.S. Treasury interest rates

remaining elevated - the benchmark 10-year note

yielded around 4.61% on Tuesday, its highest level since May.

Traditionally, higher debt costs crimp growth stocks.

However, the long-term themes around technology development,

including advancements in artificial intelligence, overshadow

any near-term moves in Treasuries, said Charlie Ripley, senior

investment strategist for Allianz Investment Management.

"This reinforces that view that the sector is going to

remain strong, and should be well into the new year," he said.

The S&P 500 climbed 65.97 points, or 1.10%, to

6,040.04 points, while the Nasdaq Composite advanced

266.24 points, or 1.35%, to 20,031.13. The Dow Jones Industrial

Average rose 390.08 points, or 0.91%, to 43,297.03.

Stock markets shut at 1:00 p.m. ET on Tuesday and will be

closed for Christmas on Wednesday.

After a stellar run to record highs following the November

U.S. election, which sparked hopes of pro-business policies

under President-elect Donald Trump, Wall Street's rally hit a

bump this month as investors grappled with the prospect of

higher interest rates in 2025.

The Federal Reserve eased borrowing costs for the third time

this year last Wednesday, but signaled only two more

25-basis-point reductions next year, down from its September

projection of four cuts, as policymakers weigh the possibility

of Trump's policies stoking inflation.

Allianz's Ripley said the themes which had driven the market

higher in the past two months remained intact, and actions by

the Fed had not killed the rally.

"Heading into 2025, things are set up with good

positioning," he said, noting factors including economic

outlook, consumption in the U.S. and the labor market.

Crypto-related stocks traded higher on Tuesday, with

Microstrategy ( MSTR ), Riot Platforms ( RIOT ), and MARA

Holdings ( MARA ) all climbing between 4.7% and 8.1%, as the

price of bitcoin advanced.

NeueHealth ( NEUE ) soared 75% after the healthcare provider

said New Enterprise Associates, its largest shareholder, and a

group of existing investors will take the company private in a

$1.3 billion deal.

American Airlines' ( AAL ) shares edged up 0.6% after

trading lower for much of the session. The carrier briefly

grounded all its flights in the United States on Tuesday due to

an unspecified technical issue.